Thursday, February 20, 2025

Insurance Good News/Bad News


I was surprised and slightly suspicious to see a headline last week that Florida Governor DeSantis had announced a victory in stabilizing the ascending rocketship of homeowner’s insurance premiums in our state. It didn’t take much digging to uncover the rest of the story.

First the good news: For about 20% of policyholders with state-run Citizen’s Insurance, mainly in the southeast corner of the state, their renewal premiums will be slightly less than last year (5.6% average reduction). This is after multiple years with double-digit average increases; 10% in 2022, 10.7% in 2023 and 12.3% in 2024. It’s welcome news for that 20% of Citizen’s policyholders. For the remaining 80% of policyholders, their renewal notices will look like more of the same old, same old.

For the most common types of homeowner policies for a primary residence the statewide average increase is estimated at 6.6% and for all property types up 8.6%. For second homes and investment properties and all non-primary residence accounts, the average statewide increase will be 17%.

Note that Citizen’s does not provide flood coverage nor is flood damage covered by a homeowner’s policy from Citizen’s or any other insurance company as many property owners on the west coast of Florida found out last year during the two storm surge events. Flood insurance must be purchased in a separate policy through the National Flood Insurance Program. Another unwelcome discovery for many homeowners who did have federal flood insurance were the coverage limits. No matter the value of one’s home the maximum coverage available under the federal flood program is $250,000 for the structure and $100,000 for the contents. While welcome, a $350,000 check was little consolation for owners of multi-million dollar homes that were destroyed.

I’d be interested in hearing from readers about their own insurance increases. I have heard from some homeowners whose increases the last few years with providers other than Citizens far exceeded the already high average increases I noted above.

After a particularly frigid January, we woke up one morning last week to find that summer had arrived overnight. Straight from snow suits one day to shorts and flip flops the next. Hey, I’m not complaining, at least not about that. I will however repeat my annual whine about the seasonal slow play at the Cocoa Beach Country Club. If one is fortunate enough to actually be able to secure a tee time, it would be prudent to let the spouse know to expect an extended absence rather than to finally drag in the door five hours after teeing off. We expect slow play during snowbird season and prepare for it mentally but the reality is no less a bummer for that prep. We will survive. First world problems and all.

“Among men, hyperbole and character assassination mark the parameters of friendship.” _Doc Ford

Thursday, February 13, 2025

Supply>Demand

As of this morning (first posted Feb 7) we have a total inventory of residential properties in Cocoa Beach and Cape Canaveral of 408 properties, 351 of those condos and townhomes. That is up from 346 total on December 28, an increase of almost 18% in five weeks. We haven’t had this much inventory since 2011.

In the most recent 30 day moving averages, properties closed for 91% of their original asking price and were on the market for 106 days. Average time on market of the inventory is dropping as new listings pour onto the MLS. However, in the midst of the flood of new listings, 20% of the current listings have been sitting for over six months. Over 40% of properties for sale today have come on the market just since mid-November. The 81 sellers who have been trying to sell for over six months have watched as 233 other properties around them found a buyer and wondered, “Why not me?” All while inventory continued to climb.

There may be issues with specific properties that explain taking over half a year to sell but in the vast majority of cases, the price is the issue. I would repeat my advice to sellers that now is not the time to play chicken with asking prices. With increasing competition and waning buyer demand, anyone hoping to sell has to accept that the market has changed and what the neighbor got last year is no longer relevant. I can’t predict what the market will do but the direction since early last year has been against sellers. Sticking with last year’s price and hoping for the market to heat back up might be the wrong bet. Fairly priced properties are selling. Over-priced properties are sitting. Sellers have the power to choose which group to be in.

Market forces have a way of cutting to the chase rather quickly.” _JB Pritzker


Thursday, February 06, 2025

I Just Want to Break Even

This post originally appeared at the new site on January 30. All new posts appear there first and most are republished here several days later. Some posts will only appear there. If you'd like access to all posts as soon as they are published, you can find them at this link. You can receive notifications of new posts emailed to you by subscribing for free. 


I’ve heard some variation of the “I just want to break even” many times over the years as new buyers embark on a search for a beach condo. Many buyers of oceanfront condos who don’t plan to reside in the unit hope to generate some income from their unit when they’re not using it. This is entirely possible in most condo complexes. The exceptions are those condos with long minimum rental restrictions. If a complex has a one year minimum rental period, of which we have quite a few like Xanadu or The Constellation, an owner’s plan to stay in the unit occasionally is not going to work. Likewise a complex with a six month minimum rental period like Coral Sands or Water’s Edge is going to be difficult to rent if the owner plans to use it during our high season between around Christmas through Easter. Finding a renter for at least six months that don’t include the months of December through April is difficult. Some owners get lucky but many sit empty when the owners aren’t there. The same holds true for three month minimum complexes like Solana Shores or Park Place. For owners who don’t plan to use their unit during snowbird season, finding a renter is usually easy and rents are highest during that time.


The chances of finding a renter outside of snowbird season become much more likely with minimum rental periods of a month or less. It’s not unusual to have visitors who stay for at least a month during the summer months. However, the bulk of our summer visitors are here for only a week or two so a one week or less minimum offers the greatest opportunity for income while still allowing some personal use. We have quite a few condo owners who stay in their units for snowbird season and enjoy income from weekly renters the rest of the year.


If you are hoping to buy an oceanfront condo that generates enough income to break even, your best shot at that is with a unit with a minimum rental period of one week or less in a complex like Sandcastles or Cape Winds. With decent management most of these units can cover all expenses and turn a profit. How much depends on how much and when the owners use the unit for themselves. Here’s a related post I did ten years ago with more on this subject.



I hope everyone enjoyed our brief warmup this week. It’s been an unusually cold January. As we get into February I’m expecting a busier season than usual because of snowbirds displaced from their usual winter spots on the west coast of Florida that were damaged or destroyed by the hurricanes last year. Welcome.


On the wisdom of attending timeshare presentations for the free gift, Nisiprius said, “Stealing bait from mousetraps is dangerous, and I have a friend with an unwanted timeshare to prove it.”